Protest challenging the cancellation of a solicitation is denied. Following a GAO decision sustaining a protest, the agency cancelled the solicitation. The protester that brought the GAO protest sued, alleging that the cancellation lacked a rational basis. The court noted that cancellation decision was not well-written and had produced “understandable frustration”. Nevertheless, the court was able navigate through the mire and divine a rationale for the cancellation decision.
For several decades, the Air Force has operated a tracking and instrumentation station on Ascension Island, a volcanic rock in the South Atlantic. The island has been used for signal interception, climate change monitoring, and as a NASA tracking station.
Since 2015, the Air Force administered activity on the island through two contracts: one for base operational services, and one for radar and telemetry support services. The agency found, however, that managing two contracts on the island was inefficient. Thus, in 2019, the Air Force decided to consolidate these two contracts into a single solicitation, called the Ascension Island Mission Services (AIMS) contract. Once award was made, the Air Force would descope a portion of the radar contract to remove geographically unrelated requirements.
After issuing the AIMS solicitation and evaluating five offerors, the Air Force awarded the contract to Chugach Range and Facilities Services (CFRS). An unsuccessful offeror, Yang Enterprises filed a protest with GAO. In response to the protest, the Air Force took corrective action to reopen discussions.
Following the corrective action, the Air Force again awarded the contract to CFRS. Yang filed another protest with GAO. GAO sustained the protest.
While these protests were being litigated, Congress established the U.S. Space Force within the Air Force. The portion of the Air Force that had cognizance over the AIMS procurement became part of the Space Force.
Shortly after GAO sustained Yang’s second protest, the Space Force determined that the radar and telemetry requirements in the AIMS solicitation did not meet the agency’s needs. Accordingly, the Space Force decided to cancel the AIMS solicitation. Yang then filed a protest with the Court of Federal Claims challenging the cancellation decision.
As an initial matter, the government argued that Yang lacked standing to protest. The government contended that Yang would only have standing if it could demonstrate that it had a direct economic interest that had been affected by the cancellation decision. The government reasoned that Yang could not demonstrate it had suffered a competitive injury. The decision had not really impacted Yang economically. The only thing it had lost was the competitive advantage it would have had if the solicitation had not been cancelled. At best, Yang had lost the trivial costs that it would cost to recompete
But the court found that this was a glib view of Yang’s injury. Yang’s injury was not just the costs it would expend to recompete. Instead, the court opined, Yang’s non-trivial injury was to the dependability of the competitive process and the company’s expectation that the process will not unexpectedly fold for arbitrary reasons.
Still, the government argued that Yang’s injury was not redressable because the Space Force intended to issue a new solicitation. Yang could just submit a proposal in response to the new solicitation.
The court, however, reasoned that even if a new solicitation was on the horizon, consideration of that solicitation would be improper in this context. Depending on the terms of the solicitation, Yang could be excluded. For the moment, Yang had lost the opportunity to compete for a tangible (albeit cancelled) solicitation. It had thus suffered a competitive injury due to the cancellation. The court could easily redress this injury by enjoining the cancellation and ordering the agency to continue the decision-making process under the AIMS solicitation.
The government further argued that Yang’s protest was not ripe because once a new solicitation was issued, Yang would either win or not. Regardless, the cancelled solicitation created no hardship for Yang, meaning there was no extant case or controversy for the court to resolve.
The court was not persuaded. The mere opportunity to recompete for a new solicitation would not resolve a wrongful cancellation. This is particularly true when the terms of the new solicitation are not even final. It was conceivable that Yang may not be eligible to compete for a new solicitation. The cancelled solicitation and possibility of re-solicitation are two separate events. Operation of one does not nullify the capriciousness of another. If the government’s argument were correct, then the mere possibility of a new solicitation would strip the court of jurisdiction from reviewing a cancellation.
As to the merits of the protest, Yang asserted that the cancellation decision was irrational. In particular, Yang argued that the Space Force had not shown in the decision that a change in requirements necessitated the cancellation.
The court acknowledged that the cancellation decision was brief and not terribly clear. Nevertheless, the court was able to divine the agency’s reasoning through the haze. The court noted that the Air Force had consolidated the two Ascension Island contracts to address inefficiencies. To facilitate the consolidation, the Air Force had planned to descope the radar and telemetry requirements. But the creation of the Space Force changed the landscape. Now the requirements on the island would be monitored by the same office, so there was no need to consolidate them and no need to descope the radar and telemetry requirements.
Yang complained that the Space Force had not considered alternatives to cancellation, like for instance, amending the solicitation to remove the radar and telemetry work. The court found this unavailing. Amending the solicitation would just force offerors to revise their proposals and likely create more difficulties in the award process. An agency is not required to address every corrective action option, but must simply provide a reasonable corrective action and adequately explain its reasoning for doing so. The Space Force had satisfied that minimal burden.
Yang is represented by Damien Clemens Specht, James A. Tucker, and Lyle H. Hedgecock of Morrison & Foerster LLP. The government is represented by Ioana Cristei, Steven J. Gillingham, Martin F. Hockey, and Brian M. Boynton of the Department of Justice as well as Major Thomas F. Pfeifer of the Air Force.
